Future Distribution Network and Operating Model
SUMMARY
Siecap conducted an assessment to identify best-fit warehouse networking and operating model for a leading fertilizer manufacturer.
Due to the highly seasonal demand profile, Siecap modelled peak and non-peak demand conditions against operational constraints to identify the best warehousing options to select, based on respective operational capabilities, inventory holding capacities as well as warehousing and transport costs.
CHALLENGES
DEFINED NEED
Following several business transformation initiatives in the recent past, the demand on the clients supply chain was being managed by temporary 3rd party warehouses.
The client was considering multiple options for the future of their warehouse network including:
- Remodeling their current facility to expand storage capacity
- Building a new facility
- Continuing with a hybrid model of in-house and 3rd party facilities
- Moving to a 100% 3rd party model
SOLUTION IDENTIFIED
The client was able to identify the best-fit warehouse network and operating model for managing peak and non-peak demand.
METHODOLOGY
Assistance was required to identify the best-fit model based on operational constraints and cost before moving to a full-scale transition development plan.
PROJECT INITIATION
Project objectives, approach, scope, and timeframe defined and agreed. Project resources allocated and project management protocols established, data and other information requirements identified.
PROJECT BASELINING
Data/information received, profiled and validated.
MODEL BUILD-UP
A comprehensive model was built to simulate multiple network scenarios. Operational capabilities/limitations and financial benefits identified in-relation to scenarios, peak vs non-peak periods. Transport operations and warehouse activities were modelled and compared against existing capacities to assess feasibility of each scenario.
RECOMMENDATIONS
Best case scenario was identified along with the recommendations for additional cost saving opportunities.
FUTURE PROOF YOUR NETWORK
The majority of medium to large organisations operate multiple warehousing and other facilities.
As business evolves, organisations should re-evaluate the validity of the business/operational network subject to organisational strategy, availability of facilities, scale for business, growth and distribution of customers.
Having an optimised network increases business productivity, encourages better customer service and allows growth, by future proofing the operations.
Siecap’s industry-wide operational experience and business modelling capabilities can assist organisations to select and implement tailer made optimum network solutions.